Putin unveils tax breaks on Kurils; move believed to tighten grip on islands
Published: Sep 04, 2021 06:25 PM
Kuril Islands Photo:VCG

Kuril Islands Photo:VCG

Russian President Vladimir Putin on Friday announced a series of tax break plans on the Kuril Islands for all intended investors, including Japanese investors, but experts noted that Putin's stimulus package on the islands actually suggests a tougher territorial stance.

Addressing a plenary session of the sixth Eastern Economic Forum on Friday, Putin said both Russian and foreign investors, including Japanese ones, will be eligible for tax, customs and administrative benefits on the Kuril Islands, TASS reported.

The Russian President stated that an unprecedented package of benefits and incentives for businesses will be established on the Kuril Islands, which would include a 10-year exemption from key income and property taxes, as well as from land and transport taxes. Putin specified that the rule would apply to companies that were not just registered on the Kuril Islands but really worked in the region. Insurances payments for such companies will be reduced to 7.6 percent for 10 years, according to the TASS report.

In order to promote the economic development of the Far East region, attracting more Japanese capital and resources is undoubtedly beneficial to Russia. But Russia has obviously lowered its expectations of Japanese investment, which has proved to be more like lip service in the past, experts said.

Putin Photo:VCG


Russia's main goal is actually to attract more domestic residents and resources to boost the local economy by introducing preferential policies, Cui Heng, an assistant research fellow from the Center for Russian Studies at East China Normal University, told the Global Times on Saturday.

The territorial dispute over the Kuril Islands between the two countries dates back to the end of World War II. 

According to TASS, Russia's defence ministry in August announced a plan to build 51 more pieces of military infrastructure on the islands.

By establishing an economic zone across the Kuril Islands, Russia actually goes one step further to tighten its grip over the islands, which Japan has claimed, Cui noted, adding that the political objectives of the economic zone plan are quite clear. 

Global Times